Real option: related pages

The most widely used method of option valuation. More complex models are sometimes necessary as it uses a number of simplifying assumptions.

The right to buy or sell an asset at a pre-arranged price.

An option that is part of another security. It does not trade by itself, but it does affect the value of the security of which forms a part.

The difference between the intrinsic value of an option and its actual value is called the option value.